Discussant’s comments

MFA/Department for Development Policy

Seminar, 24 March 2017Finn Tarp

Future of Multilateralism in Development

Introduction

Setting the Stage

• Appreciate Johannes Linn’s tour de horizon

• Many difficult and important questions

• I will try to add a few more (focusing on the World Bank as the leading IFI)

• To help motivate debate and thinking

Has Foreign Aid Been a Success?

Absolutely YES

• WIDER’s ReCom programme turned every stone (300 researchers from 59 countries produced 247 in-depth studies)

• The case for success is strong: based on

comprehensive evidence at all levels:

– Micro, Meso, Macro

– The micro-macro paradox is a myth

→ http://www.wider.unu.edu/recom

Has the World Bank Played a Role in The

Success?

Absolutely YES

• Surely: too big not to have had a role

• But we have also seen some spectacular shortcomings

– Structural adjustment/getting prices right in the 1980s is an example

– Effectively the Bank dropped the ball on agriculture (key for poverty reduction) and the focus on structural transformation (key for jobs) was lost

– The doing business indicators in more recent years did not help either (promoting business and competitiveness is much more than deregulation)

• Take a look at the Stockholm Statement: https://www.wider.unu.edu/news/stockholm-statement-%E2%80%93-towards-new-consensus-principles-policy-making-contemporary-world

Has the UN Played a Role in The Success?

Absolutely YES

• Sure: too big not to have had a role

• But we have also seen a lot of “hot air” and wasted effort

– Ineffectiveness of potentially important specialised agencies and programmes is one example

– Externally driven (UN) aid coordination failing at country level is another (costs of fragmentation are very high)

• The SDGs – a new conditionality?

Is There Need for Change – and if so Why?

Absolutely YES

• Because the world is a different place

Let’s take a look at:

• The Past

• The Present

• The Upshot

Three Big Elephants in the Room

• Trump

• Brexit

• Climate change

What Should Smaller Donors Like Finland do?

A Suggested Focus

A smaller donor cannot do everything. But one key role Finland and other smaller donors could pursue is to serve as honest brokers - which mobilise knowledge networks (in a constructive and non-threatening manner) to achieve progressive social and economic transformation in poorer countries that continue to need assistance.

See: ‘Strategic Choices for Development Cooperation in the Post-2015 World’ by Tony Addison, Yoko Akachi, Andrew Norton and Finn Tarp